Insurance industry experts give their view of the outlook for commercial lines
The SME broker
Deborah Holland, commercial director, Simply Business
We expect to see continuing growth for the SME sector – it continues to be one of the fastest growing areas of the economy.
“We’re incredibly optimistic. We talk to thousands of different businesses every week through our contact centre in Northampton and those conversations are with people who are starting businesses, as well as established businesses.
“We see more and more customers who need or have to buy cover because of their contracts with people they are doing work with.
“So, generally, in the SME sector there is an increasing awareness of the need for insurance. A lot of this is being driven by builders who are self-employed and can’t work on sites until they can prove they have public liability insurance.
“The cost of claims is increasing year-on-year, as it is elsewhere in the industry, so that’s one of the key things. But as far as the exposures SMEs face go, they are similar to those faced by larger businesses just to a slightly different scale.”
The commercial broker
Rob Worrell, group managing director, Jelf
This year will be interesting, demanding and ever-changing for commercial brokers and insurers alike. The ‘losers’ will be those who think that the upturn in economy will be enough and that doing all that they have previously done will be enough.
“The ‘winners’ will broaden their intellectual infrastructure and focus on value-added engagement across risk management, consultative bespoke claims management, forensic review of the insured and uninsured activities/exposures and, of course, proactive risk profiling and risk disclosure.
“There is a lot to be gained from knowledgeable client discussions over cyber covers, the changing shape of terrorism exposures and of course environmental classes. International capabilities will be in far greater demand as the world gets smaller in terms of overseas manufacture and product supply.”
The network broker
Ashwin Mistry, managing director, Brokerbility and CII president
Clients are feeling quietly confident in the mid-market space and manufacturing is probably making the strongest comeback in the SME sector. The uncertainty of the election is a bit of a bump in the road further down the line, but hopefully in the next 100 days or so that should become clearer.
“From an insurance perspective, it’s definitely a buyer’s market. Most of the markets had a very good last quarter and saw lots of growth and benign weather, so most of the chief executives in the top 10 will be rubbing their hands.
“Some of the markets will be reporting strong combined operating ratios and what that’s done is create a little bit more capacity and a little bit more aggressive pricing.
“It’s a phenomenal market for independent, strong, professional brokers. And because clients are feeling good, insurance is becoming secondary. So as long as premiums are price-proximate, and you provide quality, advice-based service, the garden is very green.”
The regional broker
Ian Sandham, Bath branch director, Bluefin
There’s definitely a strong recovery here in the South West and every client I see is forecasting improvements in sales and the bottom line. So they are all investing and that is going to create opportunities.
“A lot of clients scaled back their cover during the recession. Now there is the opportunity to revisit their programmes and look at some of the covers they might not have bought on cost grounds.
“The most important thing for us to get right is to really know our clients, their businesses and give good quality advice. If you get it right – really understand what their processes are – then you can build a risk profile and everything is driven from there.
“There’s a different level of advice for different types of client. With a larger corporate you can ask ‘how much risk do you want to retain and how much do you want to transfer?’
“Whereas for a smaller business their budgets are lower and cost becomes a bigger part of their decision-making process. It boils down to knowing the client.”